"Gold bouncing nicely but hang on the hui is in the red?, very...

"Gold bouncing nicely but hang on the hui is in the red?, very trying sector for sure."

Rabbitoh - The problem is with the major gold miners that the HUI is comprised of. They are producing gold at a much faster rate than they are discovering it or acquiring it (replenishing reserves).

Many are mining much lower grade ores than they have ever been before in history and at a higher cost per ounce than ever before. As they have depleted most of the highgrade stuff in the last two decades and having to go deeper and deeper in current pits, the cost are going to keep increasing.

Majors are going to be forced to keep large cash reserves (already the case) instead of increasing dividends in order to purchase new projects , mostly from the junior sector , not organically (decent new projects are few and far between, especially ones with enough scale to improve the majors bottom line)

imo - the junior and mid tier space is the place to be and we could see a huge disconnect between the HUI and GDXJ (up last night while the HUI was down)in the next few years.

But the junior and mid tier space is savage if you make a wrong move. New money for financing is tight atm , so choose co's that are already demostrating a economical deposit, in the FS or developement stage, and above all - have SCALE. Majors will be looking to purchase co's that have potential for multiple deposits , not just single projects. There is a very small list of company's that make this list on the ASX, but thankfully , many have been largely forgotten by the market and huge upside remains once the major's hands are forced to make deals.